THE DREXEL AGREEMENT TO SETTLE : The Prosecutor : Giuliani Has Fans, Foes in War on White-Collar Crime

NEW YORK — The long-expected agreement by Drexel Burnham Lambert Inc. to settle criminal charges against the investment firm is only the latest episode in U.S. Atty. Rudolph W. Giuliani's personal crusade against flagrant cheating at the highest levels of Wall Street.

In recent months, there have been what nervous brokers and investment bankers view as a blizzard of indictments, including the first use of the Draconian federal racketeering statute against securities firms. Wall Street's lawyers complain that the ambitious, publicity-hungry prosecutor uses vindictive tactics to get witnesses to cooperate and that he has applied criminal law to an area that previously was left almost entirely to civil regulation.

But Giuliani, 44, the U.S. attorney for the Southern District of New York, says criminal prosecution is necessary as a deterrent. He defends his tactics, denying accusations by defense lawyers that he heaps on redundant criminal charges when his office indicts individuals who refuse to cooperate with investigations. "The decisions we make are based on the merits of the case," he said.

Drexel and the other indicted Wall Street figures are simply one category among the many high-profile targets that New York's chief federal prosecutor has gone after since he took office five years ago. Friends and colleagues describe him as a zealot among crime fighters. His targets have included high-level organized crime figures, corrupt New York City officials, congressmen, the Teamsters Union, and Ferdinand and Imelda Marcos.

After what some say was a slow start, Giuliani has turned the aggressive prosecution of Wall Street figures into a hallmark of his tenure as U.S. attorney. The Drexel prosecution adds to a long list of insider trading and securities fraud cases brought about at least in part because of Giuliani's decision to expand the office's securities fraud unit. It now includes 14 assistant prosecutors.

The office has brought about 60 insider trading cases since Giuliani's first full year in office, compared to only 12 ever brought before in his district.

Until recently, prosecution of insider trading and related violations was left almost exclusively to civil proceedings by the Securities and Exchange Commission.

Giuliani's office handled the plea agreements that led Wall Street executive Dennis B. Levine and stock speculator Ivan F. Boesky to cooperate with prosecutors in other investigations. It was that cooperation that led directly to Wednesday's settlement agreement.

Among the other indictments to come out in the past six months are stock manipulation charges against GAF Corp. and its vice chairman, James T. Sherwin, whose trial began Wednesday; market manipulation charges against well-known stock speculator Salim B. Lewis, and racketeering and other charges against Princeton/Newport Partners, a small investment firm that had extensive business dealings with Drexel.

Stanley Arkin, a defense lawyer and authority on white-collar criminal law who represents a number of those indicted by Giuliani, including Lewis, accuses the prosecutor of "cynical, malicious redundancy" in some indictments.

The one against Lewis, for example, contains 22 counts, carrying a possible maximum sentence of 110 years in prison and nearly $50 million in fines, for what he says boils down to a single allegedly illegal act.

Some criticism also stems from Giuliani's persistent presence in the news. He holds frequent press conferences--sometimes two or three a week. He is thought to have major political ambitions. Lawyers and law professors who give him high marks as a prosecutor question whether he has demeaned his office by cultivating publicity.

"His predecessors (as U.S. attorney in Manhattan) were in the press, but not as often and not in the same way," said Richard H. Uviller, a law professor at Columbia University who otherwise strongly praises Giuliani's record. He added: "Unfortunately, Rudy is one of these guys who just can't resist a microphone."

Giuliani became U.S. attorney in 1983, giving up his post as the third-ranking official at the Justice Department in Washington. He had supervised the Justice Department's criminal division and was one of the chief architects of the Reagan Administration's strategy for fighting drug trafficking.

Before he went to Washington, Giuliani had been an assistant federal prosecutor in New York, handling New York City police corruption cases, and later was a partner in the law firm of Patterson, Belknap, Webb & Tyler.

He is married to Donna Hanover, a news anchorwoman on New York television station WPIX. The prosecutor was raised in a devout Catholic family and at one time considered entering the priesthood. The sense of rigid morality he developed as a child is said to have carried over into his attitudes about fighting crime.